School board votes yes on ice arena

After much speculation, the financially troubled Forest Lake Area Athletic Association Sports Center is on track to be sold to the Forest Lake School District for $3.3 million. Above: Crowds pack the facility and nearby Fenway Athletic Park. (File photo)

Public hearing scheduled for May 30

Mary BaileyCommunity Editor

The school district is one step closer to buying the Forest Lake Area Athletic Association Sports Center.

With one dissenting vote, the school board on May 2 voted to start the process of purchasing the home of Lichtscheidl Arena from FLAAA.

The district would pay $3.3 million, below the appraised market value of $5 million, for the building and contents.

At that price the district expects the arena to create a profit beginning in the first year, adding $100,000 a year to the general fund.

The district has been leasing facilities for athletic programs but would now lease to other groups.

The school district’s purchase would be funded using abatement bonds paid over 15 years, with debt service for the bonds added to the property tax levy.

The interest rate, according to Business Manager Larry Martini, would be 1.8 percent. The annual cost for the owner of a $200,000 home would be about $13.

No referendum is required, but a public hearing will be held at 6 p.m. on May 30 at the district office, 6100 N. 210th St.

The athletic association would be out of the business of running the arena. The volunteer organization’s one employee, Larry Porter, said there are mixed emotions, but he thinks it’s a good deal.

A few years ago, when the school district needed $40,000 to keep the old Maroon and Gold Arena open for one more year, FLAAA provided the funds even though hockey was not part of the organization at that time, he said.

And when the community needed a new arena, it was FLAAA who took on the responsibility. The building opened in December of 2008.

Every spring and early summer, a time with less call for ice, Porter said FLAAA had to draw down reserves to make the debt payment. Not wanting to continue with that struggle, “we went to the banks. They wanted to get out, too.”

Four banks—Village, Frandsen, Mainstreet (now Central) and Patriot (now First Resources)—are nearly equal owners of the outstanding debt of $4.6 million. They all agreed to take a loss on the debt. (Two of the original four banks failed and have been taken over by new owners.)

At the FLAAA meeting on May 1 (the day before the school board meeting), the 16 members of the FLAAA board all voted in favor of selling the arena to the school district.

Superintendent Linda Madsen and Business Manager Larry Martini recommended approval of the purchase, and school board members also expressed support.

Dan Keiger, who made the motion to initiate the process, said, “I want to make sure this is something this community can enjoy for decades.”

Karen Morehead said the space would benefit the entire community, as it is used for much more than hockey, including other sports and even an Easter egg hunt during the cold weather this spring.

Erin Turner called the purchase a positive addition both budget-wise and opportunity-wise.

Gail Theissen pointed out that the school district and FLAAA have always had a good relationship and said, “It’s gotten to the point where it’s just meant to be.”

Julie Corcoran said it’s more than just an arena: It’s “the only thing we as a community have come together and done for many years.”

Board president Rob Raphael said the school district took a very thoughtful, conservative approach, including hiring an audit to get cash flow projections. “$3.3 million is a real win for this district,” he said.

Raphael said extra-curricular activities teach kids discipline and help them find a place in the community, and “when we can do it in a way that helps our bottom line, to me that’s a win-win.”

The lone opponent, Kathy Bystrom, said “from a business perspective this picture is much brighter, but the question for me is, should the district be in the arena business? No matter how much I try to come to that conclusion, I can’t. It’s a want, not a need.” Bystrom said the district should “remain laser-focused on our facilities plan.”

Bystrom said the arena should be owned by the city of Forest Lake, but Morehead argued that school district ownership is better for the communities surrounding Forest Lake.

The closing date specified in the purchase agreement is June 30. Porter said the banks are hoping the entire deal will be done by the end of their second quarter.

Before closing, the school district must conduct abatement bond hearings, get approval from the Minnesota Department of Education, and conduct a due diligence study to make sure the facility is in good condition.

In addition, the city of Forest Lake must consent to the assignment of the current ground lease from FLAAA to the school district.

Also required is a new agreement between the city and the school district for blacktopping the east-side parking lot, which FLAAA was not able to complete.

After 10 years of working on the arena project, what will happen to Porter? “I’ve been trying to retire for more than a year,” he said.

Porter plans to stay on as gambling manager and run the pull-tab operation until the end of the year, while training his replacement.

Winner #1: FLAAA gets out of the financial mess they created. How long will it be before we warn of the next mess they will propose?

Winner #2: City of Forest Lake gets out of the deal in the financial mess that FLAAA talked them into.

Loser #1: Forest Lake School District now has greater liabilities and just bought a failed business. It will give them future debt they are not set up to take.

Loser #2: Taxpayers will ultimately now pay for the poor decisions that FLAAA created.

F.L. Resident

I agree 100% Eric!

Too bad the taxpayers of this communtiy will forget stuff like this when the school district wants to pass their next referendum.

http://www.EricLangness.com Eric Langness

If you want to fund it, I’ll make certain that we inform the voters of this and other decisions just before the election!

Jay Lad

Eric Langness I asked you previously if you’d agree to do away with the school’s hockey program, a.k.a. as the need for paid ice time. You NEVER responded. The District, at the BARNEY’S BARGAIN BASEMENT price they got the arena for, with wise management, may be the rare entity who just may make money by owning this arena. I preferenced that idea saying we’d have to wait a few years to find out. Either you start peeling away the sports programs or you fund them. What to do here Eric, what should be cut first? Break the news right here!

A Member of this Community

Eric

You have no idea what makes a community. You have never embraced the FL community in the past, and I expect you never will.

This wasn’t a perfect situation, but it is a good solution brought together by community-minded organizations driven by individuals who care about our community and understand how this asset strengthens our community.

Perhaps someday you will come to that realization.

http://www.EricLangness.com Eric Langness

Maybe you fail to realize that I was one of the members of the Community Center Task Force long before this project ever was built. It’s not that I don’t care about the community and frankly I’m equally a member of it as you and everyone else.

My points before they built this project and those currently are with regard to the mismanaged financing of it. Building things for our community are sometimes a good thing and when the financing of those projects is sound, they can be great. This never had that component and likely never will.

Jack

Langness served on the public schools board in our area for a long time. I also recall him doing many other things for our community. Saying he doesn’t understand is naive and your insults cause me to believe that he is correct on facts and your reply of insults is due to you not be on the right on facts. Should Langness ever run again, I might consider supporting him this time.

Community

Totally agree with Member of the Community! Many dedicated members of FLAAA tried their best to make something viable for the kids in this community, that we all should have been providing all along. They lost a major amount of money in this project, not unlike many very successful business people in the past 5-6 years. We all know it has not been an easy economy. But does that mean we give up on our kids, and let the only thing close to what we have as a community center sit there vacant, and let the facilities rot? I believe the School District can make this work. They are very successful in their business management and will bring this to the running of the arena and sports fields for the betterment of the entire community, not just Forest Lake.

Eugene Huerstel

Eric & the rest of the common sense people knew the arena would not work financially. Yes there are plenty of good things out there that we and all the people need or want. They just do not work. It sad that the teachers work for little or nothing but we can spend 3.3 million dollars on an arena but not on them.
When will it stop, maybe we could think up another nice thing and not worry about the millions of dollars were in the hole with the parks in the Forest Lake City?
We need to take care of the school buildings and now that has come to a head. Some people can justify just about anything. Lets bring the community together with common sense not just justifying anything and everything.
If you believe in what you say,(member of the community) sign your name and do not hide under your desk. Eugene Huerstel